that are, eh, quiet this morning. relatively unchanged. china rallied overnight despite the finance ministry briefing that was light on the details on the size of the government stimulus. boeing cutting 17,000 -- thousand jobs -- as a strike by the machinists enters its fifth week. and spacex successfully returned the booster to the launch pad. it's monday, october 14th, 2024 and "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin.

this morning, we are looking at a mixed picture as we start the week. it looks like the dow futures are off 40 points. the s&p futures up 6. the dow and s&p climbed to new highs on friday. s&p up 45 times this year. the major averages stand for the month of october to date with the dow up 1.25%. the s&p and nasdaq are each up .9%. the bond markets are closed today for the columbus day holiday, but here's where the yields stand. you will take a look right now and see it has been just above 4%. 4.09 for the ten-year. the two-year at 3.95. stocks in china rising overnight. the csi 300 and the shanghai up 2%. the shenzhen up 3%.

in hong kong, stocks down 3%. on saturday, the finance minister delivered a press briefing that did not offer the size of the stimulus that beijing plans to pump into the economy. the finance minister focused on measures to tackle local government debt problems, including a plan to funnel money into the coffers of provinces. they may have to wait for the meeting later this month for the size of the coming stimulus. investors are expecting support measures between 140 and $425 billion. meantime, becky, separately, china's military launching a new round of war games near taiwan overnight. it said the military exercises were a warning to the separatist acts of the taiwan forces. china's regional military command said the war ships and aircraft were approaching taiwan in close proximity from several

directions. taiwan had been alert for more war games since last week's national day speech by taiwan's president. officials in t'aipei calling the war games blatant provocation. the biden administration was monitoring the drill and nothing from them. we have a lot on the squawk planner. earnings season. we have bank of america and citigroup and goldman sachs and johnson & johnson and united airlines and then on wednesday, morgan stanley, csx coming up. thursday, we hear from blackstone and travelers and on friday, american express and p&g on the docket. that is not all. we also have data coming up. we will get september import and export prices on wednesday. thursday, jobless claims and retail sales and on friday, september housing starts, joe.

all right. on saturday, a man was arrested after he was stopped at a checkpoint near a campaign rally for former president trump. authorities say he was attempting to enter the inside perimeter of security that was protecting the venue with an suv that displayed an obviously fake license plate. deputies found two unregistered firearms and shotgun and unloaded handgun and ammunition. he believes his deputies prevented an assassination attempt. he was not in any danger. federal law enforcement officials are investigating, but do not currently view this as what would be the third assassination attempt. some news out in directly made of the former president trump's tariffs. this comes from long-time trade adviser robert lighthizer telling money managers that

former president trump would move quickly on his sweeping tariffs proposal if elected. this is a report from piper sandler who said former trade representative robert lighthizer has been briefing investor groups. he said trump could announce 60% tariffs on china and 10% across the board tariffs shortly after taking office. when asked about the report, though, the trump campaign press secretary did not deny lighthizer has been meeting with investors, but said, in his words, or her words, no policy should be deemed official unlesses it comes directly from president trump. lighthizer has been advising the campaign on the economic issues and a board member of trump media. the trump media shares soar up more than 60% in the month of october and now about double

from its lows. right now, let's get to the latest nbc news poll. it shows a deadlocked race just three weeks before election day. among support from registered voters, harris and trump are each at 48% in a head-to-head match up with 4% saying they're undecided or wouldn't vote for either. that is a change from the september poll which showed harris leading trump by five points. although, that was the result was within the margin of error. harris was among the advantage of black voters and ages 13 to 84 and white voter was college degrees. trump leads among rural voters. harris leading with women voters by a 14-point margin with trump leading with men by 16 points. meantime, this is pretty incredible over the weekend. spacex launching the fifth test of the starship rocket in a

cinematic first catch of the super heavy booster. it marks a milestone in spacex goal of the reusable rocket. it returned to land on the l launch tower seven minutes after it lifted off. the arms, known as chopsticks, catch the rocket. traveling now halfway around president world before splashing down in the indian ocean. a pretty cool moment in future of our species, potentially. i don't know. in the meantime, delta airlines is suspending the hot meal service on more than 200 flights out of the detroit hub the past few days because of food safety issues. the hot food would be managed by other kitchens and said during the recent inspection, the catering partner was notified.

no customer illness was reported. the flights were stocked with additional snacks and customers given travel vouchers or frequent flyer miles. i don't know. i think the cold meal is often better than the hot meal. >> it all depends. all depends how long it's been there and where it's from and the pre-handling. >> you had issues, didn't you? earlier this year? >> you can't -- you don't know what it is. it could have been the lettuce. there are places with lettuce issues. i don't know, that gross, greasy salami. >> packaged chips and pretzels are good. >> yeah. if you have any inclination for fasting, if that's something you think might work, you got a plane ride.

fast. it's just -- bring something along with you that you kept your eye on. you've seen where it's been. yeah, that was -- >> that was earlier this year. it seemed like it was a long time ago. >> my life passed before my eyes, that's what i thought. >> your life? >> yeah. yeah. because your entire -- >> my fault. i did this. >> it can take over. it stooarts here. it can take over. >> we know. >> i apologize. >> then it slowly -- >> my fault. i apologize. >> slowly moves and finally. >> my bad. the s&p 500 -- sometimes into the slow. s&p 500 gets another boost on friday closing above the 5,800 level for the first time ever. will the next batch of earnings

keep moving it higher? the boeing strike entering the fifth ek a nwendow the company is cutting jobs. they come back and settle the strike? we'll hear that story straight we'll hear that story straight ahead.all that planning has paid off. >> announcer: squawk planner is sponsored by ameriprise financial. d the feeling of con that comes from our advice... i can make this work. that seems to be universal. i can make this work. i can make this work. no wonder more than 9 out of 10 clients are likely to recommend us. because advice worth listening to is advice worth talking about. ameriprise financial.

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of the work force or 17,000 people amid the machinist union strike that idled factories. it will push back delivery of the 777 until 2026. the company is warning it report a bigger loss in the third quarter. the ceo, kelly ortberg, said they will have to make structure changes and deliver for customers over the long term. boeing shares down right now by 1.8%. if you are looking year to date, down 43%. if you look at the longer chart, it shows a bigger decline on these issues. you must know this by now. earnings heating up especially this week after last week. joining us with a look at the markets is stephanie link, hightower chief investment

strategist and portfolio manager. stephanie, i thought you were messing with us. at the top, it said she was really, really excited. earnings season is here. exclamation point. it's nice you are playing along with our promos. we're trying to get really excited, too. you have a reason for it. finally, you will get a break from talking about the fed and macro stuff. >> yes. >> and delve into the minutia of earnings and welcoming that. >> i'm very excited for earnings, joe. i don't want to talk about the fed. >> is that what did it? you watch your promos and say, oh, my god. honey, get in here. it's earnings season. >> earnings season is going to be good. it's going to be good. we're off to a very good start with jpmorgan and wells fargo. i added wells fargo into my portfolio on friday -- >> you did?

>> yeah, because the banks are set up really well. they had really good credit quality. wells fargo saw a decline in commercial real estate and net charge offs. that gets me excited. that's the thing that has been bothering me about the regional banks in general. they had good credit quality and so did jpmorgan. they are talking about a trough in the net interest income. we have to wait to see the results in net interest income in 2025. in the meantime, non interest income, investment banking, wealth management and credit card and capital markets are doing better than expected. both companies are taking share which i think is positive. wells fargo trades at 1.3 times book and we have the asset cap removal potentially coming in the next couple, i think, couple of months. it's been since 2017 that they've had the asset cap restriction on asset cap for a

while. so, i think you will start to see a resolution there and that's going to be a nice catalyst. i like the banks. i think they're set up pretty well. >> we're in the end game of basel iii. they will return to normal. >> yes. >> if wells fargo can do it, then some of the other names can definitely do it that haven't reported. >> that's for sure. i like truist on the same theme. it's a self help. they're doing all they can while they wait for the big bulk of their business, net interest income, to improve. that's good for truist. that's 70% of the total revenue. in the meantime, the last two years, truist has actually cut costs and focusing on gaining market share. they're investing to grow in the future. 2025 is a good set up for them because profitability should

improve. in the meantime, they have a $5 billion buyback. again, baseil iii end game. >> besides the banks, what do you like? crowd? >> i do. i like crowdstrike. i know its recovered nicely since it fell 41% since the software glitch. it's still down 18%, joe f, fro its highs. it is still the number one company in the industry and it's on sale. i know it's not cheap on the pe basis. if you can get the number one company with the number one product in cybersecurity, which is one of the number one themes in technology that i like, i think it's set up well. what is interesting with their quarter was in the face of the software glitch, they had a 98% retention rate which is really pretty important because a lot

of people thought the glitch would mean people and companies would leave crowdstrike to go elsewhere and they're not. you've got a company that's growing on 40% earnings on 30% revenues. subscription represevenue is up. >> chipotle is down a little bit from its highs also. you would buy that? >> i like chipotle. this is the same theme. it's number one in the industry. i think the numbers have been derisked. you know, they did lower the same sale store numbers a couple months ago to 6.1%. people are not taking the price increases they have been over the last couple years. they're still going to grow nicely. double digits in terms of earnings and revenues. i know everyone is nervous that brian niccol left as ceo. they have a strong bench and

d great team. down an 15% from its highs, too. >> we have time for one more. you like gap. >> i do like gap. i've never owned gap before. i do think that the company has done a really good job in terms of cutting their inventories. gross margins are expanding. you have richard dixon as ceo. he has been there since late 2023. sometimes it takes a couple of quarters for a new ceo to gain momentum. i think he actually is. he's hired a new ceo of agthlet and old navy. inventories are down nicely. they will not have to mark down. they will not have to and as a result, you will see better gross margin. stock is trading 12 times earnings with the 3% dividend yield. i like that one a lot. >> and quite a bit from its highs, too, down about 25% or

so. >> yeah. yeah. i'm just trying to find things are down and not out, but forgotten for the time being. i think all three of those names set up pretty well into earnings. i don't want to chase. you don't need to chase in this market. >> would i ruin your day at 4.1% ten-year? in your view, could that get dicey if the numbers stay strong in the economy and maybe there's a pause? a reverse? pause. a pause coming down instead of the pause we saw going up? >> well, you know what? i'll take higher growth and little bit higher in inflation than interest rates any day. >> most of them are already the main line free money. >> i know. i know, but at the end of the

day, we're growing at2% to 3% in the economy. we should cheer that. rates could easily stay at the 4% level. i think we can handle it, joe. we have handled higher interest rates because we have a lot of stimulus in the system. the consumer is still really strong and they're spending. remember retail sales got revised higher last month. manufacturing, we're seeing a renaissance there with the on-shoring and re-shoring. i don't like higher rates, but i can deal with it if the reason we are seeing higher rates is because we're seeing better growth. >> steph, we'll end it there. what month is this? is the christmas tree out of storage yet? >> it's coming. it's coming in a couple weeks. >> you're not kidding? >> nope. >> christmas lights. >> it comes way before black friday at the link house.

>> before halloween. >> yeah. yeah. thank you. sorkin, talking about chipotle. can you imagine if the airlines had to serve guacamole? refried beans? someone wrote in. you can't always trust twitter. >> i was just reading. >> worked in the catering division. ev never, ever eat a salad. never eat a salad on the plane. >> packaged goods. the fasting advice was the best ad advice. the truth is you do not digest your food as fast. your metabolism slows down at an altitude. >> okay. >> if you are trying -- you will gain weight eating higher

altitudes just by default. >> okay. >> news you can use. news you can use. when we come back -- >> unless you eat a salad. >> or maybe not. when we come back, elon musk's x platform dropping a deal after the ad spend deal. we'll bring you the details on it. as we head to break, check out thpre e icof bitcoin. $64,895. we'll talk about that with tom lee in the next hour. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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welcome back to "squawk box." elon musk's social media company x dropped unilever from the lawsuit against the advertising coalition and large marketers. the court filing on friday, x dismissed the claims against the consumer products company with each bearing their fees and costs. u unilever said x insured the safety on the platform. x said it would continue to pursue the claims against the other advertisers alleging they conspired to hold back ad dollars over safety standards. this came after the famous go you know what yourself that we discussed with the old shot of that from almost a year ago now when some of this all began.

interesting to see that unilever switching sides, if you will, and the question, of course, is other advertisers will break as well. >> it's just such a weird question to try to figure out is there a conspiracy to pull your ads. i understand the free speech argument completely and appreciate it. advertising seems like a different story if you choose to advertise or not. the heart of the lawsuit going after them is that they're conspireing and i guess it is something of a cartel, i assume, is what they're alleging? >> right. the claim, it is interesting. you can't force anybody to advertise on your web site or newspaper or tv channel or whatever, but if every advertiser were to get together and discuss it and say we will not advertise there specifically, that itself could be a claim.

>> collusion to damage the business. >> a whole group of advertisers have come together to do that and how have they done that? have they done it through industry groups or advertising agencies that all came up with similar policies? do those advertising agencies go to industry conferences where they discussed not advertising on x and try to block? that's the real question and whether in discovery you will see emails or texts or this or that where there's a decision where everybody comes together to decide. that i imagine it will be hard to find that, but i would not be surprised if you found different advertisers or cmos or some people at some point having discussions with each other over brad safety. do they think this platform is safe or are they going to advertise and the other person saying i'm not going to advertise? then the question is are they

conspireing together or not? >> yeah. it's an interesting question and i'm sure we'll see a lot more through discovery. when we come back, the sectornomics power play with the focus on energy. later, fundstrat's tom lee will give us his opinion on the stock market with a couple weeks before the election. "squawk box" will be right back. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast! you locked us out?! and when thrown a curveball... arrggghh! ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow! (♪♪) car, this isn't the way home.

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good morning. welcome back to "squawk box." live from the nasdaq market site in times square. after a solid session on friday, this morning, mixed. nasdaq up 65. the dow indicated down by 58 points. right now, it's time for another edition of sectornomics. dom chu has the latest. hey, dom. >> becky, if you look why energy is in focus, we see the geopolitical risk driving the oil trade. it also has been the third worst

performing sector in the s&p 500 this year. that's why it has traders thinking about what the valuation picture is like now. if you look at the sector spdr for the xle. if you look at the best performing stocks within the energy sector so far over the one-year period, it is targa and kinder morgan. meanwhile, exploration company apa is down 34%. that gives you the spectrum. with regard to where we see the lofty valuations compared to the rest of the sector right now, take a look at these. it has been targa at 29 times earnings on the forward basis. eqt at 29 times earnings on the forward basis and williams at 27 times earnings. all of these are forward pe

ratio. how much you pay these today for the next year anticipated picture. if you look at the energy sector overall, look at the big valuation on the forward pe basis, becky. >> i hate to throw you this without warning, but what is the historical valuation? >> right now, you are talking in the forward pe range at 10% to 15%. what we don't show you is the graphic we're having a problem with. if you look at halliburton and devon, they are 10 on the forward pe basis. that gives you the idea of the wide range we're seeing, becky. on the one side of things, pipeline operators have been attractive investors for penopl trying to find energy investment not correlated to oil. many are not correlated to oil. if you look at halliburton or devon, this is trading 9 times

forward basis. this is maybe where you see the interest in the value type names in energy. >> do any of the names in the energy sector try to wrap themselves up in the a.i. business to say we'll get a lot more demand our way with the huge demands for power when it comes to a.i.? >> i have not seen any of those, but it does beg the question because utilities have been part of that big story. if you look at the nat gas providers, if they are part of the story and if they do power some of the utilities that generate electricity that data centers want to hog over the course of the next several years, maybe that becomes the third or fourth or fifth degree trade on whether to ride. we have the nuclear stories developing right now. we have alternative energy stories developing for powering a.i. datan't ncenters. if the companies sign agreements for dedicated power sources, maybe that pipeline is a bigger part of the story.

it is also, becky, from the conversational standpoint, you have to think about what the future is for fossil fuels and hydro carbons in the country and whether or not that will play a bigger or muted role of power in the coupntry. >> dom, thank you. good to see you. when we come back on "squawk box," weeks way from election day. the race is super tight. what we can expect from the campaign trail. we'll do that next. reminder, you get the best from daily podcast. you can listen anytime. you can do it right now. we're coming right back after this. >> announcer: sectornomics is sponsored by sector spdr etfs.

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welcome back to "squawk box" this morning. the latest nbc news poll showing

a deadlocked race with vice president kamala harris and former president trump. joining us right now is toby marcus at wolfe research. we got a number of new polls over the weekend. toby, i'm curious if you can divine anything in them of who the victor will be. >> certain, we're not close to knowing who the winner will be and the betting markets have swung back to trump fairly significantly in the past week and a half. the polls, i think, have shown a much more muted movement. one way or the other, they are both pointing to a toss-up race. 55-45 in one direction or the other. the key is we are nowhere near the certainty to lead reports to make big directional bets on the outcome of the race before election day. you know, i think we are firmly still in scenario planning mode. that is certainly the way the clients i'm speaking to on a day

in and day out basis are thinking about the election. what are the major policy levers that we're looking at in a harris or a trump win. >> are you of the view we should be focused on more of the betting markets as a signal in terms of where the election is headed? are you of the view we should look at the polls? are you of the view the polls are wrong? they under count former president trump or harris in some way? >> we look at a variety of data sources and try to take in, you know, every available indicator of where the election is going. i tend to follow the polling base models most closely. i think that's what has the best historical track record. the betting markets are a great indicator of consensus and figuring out how people with money on the line are assimilating changes in the

state of the race on the real-time basis. certainly in 2022, last election we went through, the betting market bet fairly hard on the red wave at the time. it was never supported by the polls and never aired out. they are an important input and a good thing to watch, but not a unique claim on truth. from the polling perspective of whether or not we take the polls at face value and trump being underestimated. my thought is treat polling as largely face value y. it is a possibility we have a polling error in trump's direction. you know, i don't think we have enough of a statistical track record to say. >> do this for me. run a simulation in front of us

right now with trump winning and with biden winning and your clients calling you the next morning, assuming we know the outcome, by the way, and how you would, therefore, be advising them as it relates to investing on november 5th. >> look, if trump wins, it is coming with a red sweep. secto sectorially, the energy is the big winner. crypto, parts of managed care and from the mack ro perspectiv the steeper curve and stronger dollar and his agenda late into '25 and '26. if harris wins, we're all likelihood a divided government. we need bipartisan fiscal deals next year.

the sector winners are the mirror image of trump because you won't get the positive trump trades. clean energy looks safer because you are taking off the risk of the rollback if you don't have republican control. more of the status quo outlook from the macro perspective. >> let me throw something else into your simulation. do you believe that in the month of november, or i don't know, you tell me the date, that you will know who the next president is and they will be all calm on the western front, if you will? >> i wouldn't say all calm. i do think we'll know the winner, not necessarily on election night, but probably that week. the house might have a longer timeline because it does look close and the key house races will take weeks to count out west and southwest. we may not know the full configuration of power in washington for a while.

presidentially, it will probably take a couple days to count the votes in some of the days. then, you know, our thinking coming out of the past two cycles is courts have been pretty reliable at quashing frivolous election challenges. i think the person who wins will be the actual winner. it will be contentious and litigation and election irregulariti irregularities, but won't change the outcome. >> tobin, we will see and i'm sure we'll talk to you between now and then and afterwards. >> thanks for having me. >> joe. coming up, three americans win the bel iznopre for economics and later, former fed vice chair roger ferguson has his latest data. "squawk box" is coming right back.

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it's not just the -- >> this hour we've been saying that the knobel prizes tricklin in. three u.s. based economists awarded the nobel prize in economic sciences. the winners daron acemoglu, simon johnson, both from m.i.t. and james robinson from the university of chicago. the committee said their work helped show why societies with poor rule of law and institutions that exploit the population do not generate prosperity, growth, or change for the better. >> that's really interesting. >> i guess you figure that. the prize money about 11 million crowners or crowns.

i don't know. it's $1 million. going to be split evenly between the three. and the award, we call it a nobel prize for economics, but it's really not one of the original nobel prizes. officially it's known as the syringes rixbank prize in economic sciences in memory of alfred nobel. and i always point that out. not a real nobel prize. it's not a real science. >> it's a real topic. >> can't be an actual nobel prize if it's not a real science. like the nobel peace prize. i don't know what that is at this point. almost like the "time" magazine thing where they had a little -- >> it's cool. >> you are the person of the year. >> if you got the nobel prize, i don't think you would -- >> it's not a nobel prize. it's an economics prize in memory of alfred nobel. >> it's a nobel prize. >> okay. >> if we gave you the prize i hope we wouldn't, you know --

>> i'm not worried about that happening. >> the prize -- >> i took one economics course and i think i'm better for that, for only having one. >> abortion rights for the course i think. >> when we come back, understand's bull run. the stock having an incredible year. the demand for ai chips surging so should investors keep riding wl ckensen huang. weiltale that topic next. "squawk box" will be right back.

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with what is arguably the most successful company in america today. can we say that? >> it's true. >> probably not quite market cap in terms of getting to this market cap. >> yes. >> 16 days or whatever -- >> it wasn't quite 16 days. 32 years and 16 days. >> that was nvidia's ceo jensen huang making a surprise visit to the "squawk" set last friday. that stock has been on a powerful run over the last year, up nearly 200%. its market cap topping $2.3 trillion. joining us with more is ben, mellist research head of technology research. ben, you say that when you reiterate your buy rating on this, you get a lot of eyerolls. what do you tell the skeptics who are doubters? >> well, this is like when apple did the iphone and if you gave up on apple in year two or three of the iphone you missed a lot.

so this is really in the beginning, and what people, you know, really are skeptical about is the size, and they're already a huge market cap here, but there's still room to go. and, obviously, jensen running around new york meeting investors all over the east coast, he's got a lot of good things to say and i think you should listen to him. >> nvidia, you actually say is your second cheapest stock in your group. how do you look at it on a p/e basis? >> i look at p/e to growth and there's a ton of upside next year to our growth estimate and revenues of 40%, but there's upside there and there's probably not as much upside in any other stock. so i think it's trading at about one times p/e to growth for next year. that's really attractive for a name like this as long as the numbers are there. you know, it, obviously, if the direction is upwards to the estimates, that's really attractive still.

and i think that each day you got to walk in and say what are our checks showing us, the research showing us from the bottom up and it's still there. >> demand for blackwell, what are you seeing in your channel checks at that point? >> it's pretty huge. what the big issue is whether they get the production up and running and get through their mask issue and they seem to have done that. and whether they can get through the negative makeshift of scaling a new product and i think they will do that pretty well within a couple quarters. the demand looks insane like you said. these big clouds, you have to understand, these are huge capitalized companies and if they're going to beat their cloud numbers they're going to show the street, meaning microsoft, google, amazon, they got it buy blackwell and they got to get the customers up and running. or else they're not going to beat numbers. that's it. the that's how you get the sequential acceleration to the clouds business. the companies will say a lot of different things that, you know, it's because of how great they

are in cloud, but really it's because investors run to their platform to use the latest and greatest from nvidia and that's how they're going to be and they're going to buy a ton, and i'm pretty excited. >> what about their gross margins? there has been some concern recently about whether they could keep up the gross margins or whether they continue to drop a little? this is again from very high levels. >> yeah. that was our main concern as well, and whenever you launch a new product and make changes to it, you even write off some older inventory or inventory no longer useful. they had a larger write-off than usual last quarter, but we think that's going to get less and less as we go through. what we're seeing is them moving past that gross margin issue. what should happen is, gross margins go down a little bit for a quarter or two and then turn. we see gross margins in the

mid-70s by can power $5 in earnings power, they can demonstrate over the next four to six quarters. >> the stock was down about 2% in the calendar third quarter. what about the fourth quarter? what makes you think that this is going to be the time that things really turn around? >> well, i think that the street this time, so last year as well, third quarter is a tough time for semis anyway and for nvidia, you know, they tend to do a really -- the market tends to really hype things up in the first half and then digest it in the second half and this year a lot like last year, what happens around this time is folks start to say, yeah, i know next year is great, but what about the year after, meaning '26. i think the street this year is going to discount a little quicker that things are okay. they have that huge show in march called g.t.c and we think

they will unveil the rubin chin for 2026 there. they've already talked about it. we will hear more about it and you realize oh, yeah, 2026 is a growth year and a pretty big one. the market probably discounts that sooner than they did last year because jensen is, obviously, gaining more and more credibility which is obvious. >> ben, thank you for joining us this morning. >> great to see you, becky. >> thank you. it is just now 7:00 a.m., 7:01, on the east coast. you're watching "squawk box" here on cnbc. i'm andrew ross sorkin, with joe kernen and becky quick. stocks in china are higher overnight. the csi 300 and shanghai composite up 3%. shang zeng up 3%, hong kong stocks following 0.75%. saturday china's finance

ministry delivered a press briefing that did not offer details on the stimulus that beijing plans to pump into the economy but on measures to tackle local government debt problems after friday's close. by the way, so can you ares you what david tepper might think of all that. after friday's closing bell, meanwhile, boeing announcing it's going to cut 10% of its workforce or about 17,000 people. the machinist union strike has idled factories and pushing back the launch of its wide-body airplane, the 777x until 2026. we will talk about boeing later this hour. launching the fifth test flight of its rocket it happened yesterday and did it make a dramatic first catch of the super heavy booster that marks a massive milestone in spacex's goal of making starship a fully reusable rocket system after

starship launched booster returned to launch on the tower about 7 minutes after the launch caught by two big arms known as calculus. >> a lot of cheering. a lot of people who were on the microphone or just exclaiming in the kind of language we would probably exclaim in watching it happen. that was pretty unbelievable. i was kidding around, people never really understand sarcasm, i guess. makes me worry about things, but someone wrote, breaking, spacex rocket falls out in flames barely caught by the arm. the people that hate elon musk now that would be their headline after all that happened. we won't mention any names

but -- people said you try it. i go, did you hear the one about the ceiling if anyway. checking the futures this morning. we are a little bit mixed up 44 points on the dow or on the nasdaq, dow down about 83. let's get to dom chu with a look at this morning's premarket movers. that's like landing a 20 story building that's coming out of the sky, dom. i mean, it's -- i can't believe it can be even done, to be honest with you, can you? to pinpoint it like that. remember how we used to do it. it's going to land somewhere in the atlantic. we will get to you eventually like in three days we will find you, where you are. it's unbelievable. engineering wise. >> i would just say this, i grew up in that generation in, you know, the early to kind of mid-80s where we in elementary c school would watch space exploration, shuttle launches and rocket launches and things and do it with wonder, and i

still think even with today and all of the things that are going on right now i still have that sense of optimism every time i see anything that has to do with space exploration. >> right. >> for me i think it's cool and that's -- regardless of what the, you know, other editorial takes are on it. let's start with a look at the movers on the key analyst notes this morning. wells fargo downgrading canada goose, amor sports and vf corporation, down across the board in extended trading. the firm downgraded canada goose concerning margin headwinds, vf from equal weight to underweight and amer from equal weight from overweight. consumer ties and everything else there. let's move to another downgrade getting attention and that's caterpillar. those shares lower by 2.5% due in large part to morgan stanley lowering the construction equipment giant and the dow component to an underweight

rating. it was equal weight before. the target price goes down to 330 to 349 prior. they're citing things like concerns over possible inventory reductions in construction equipment products, also the sharper out performance already as you can see of those shares over the course of the past year. it's up close to 50% in that 12 month period. for more on those and other top calls of the day, cnbc.com/pro. keep an eye on cat shares. netflix those shares did hit a record high on friday's session. the streaming video giant reporting earnings after thursday's closing bell and a doubling of the stock you can see over the past year, the options market is currently pricing what could be a roughly 7.5% move in the stock up or down on the heels of the thursday report. that's slightly less volatile believe it or not than the stock has traded over the last eight quarterly reports. so joe, netflix a key stock in focus this week with thursday earnings. i'll send things back over to

you guys. >> dom, good to do this on a monday. tom lee going to tell us what type of environment the stock market finds itself in at this point following the recent inflation data and jobs data. the ongoing strike at boeing leading to thousands of layoffs. the stock down more than 40% this year. can the company overcome its challenges? that and more when "squawk box" returns.

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partner and head of research at fundstrat global advisors as well as a cnbc contributor. tom in recent appearance, i would say that your conviction hasn't necessarily been quite as strong as it had been in some of your other calls where it -- there's been a time where you said the inflation data will be so good the s&p will be up 200 points in the next week, and it panned out, and it played right into what you were saying. the last time you were on, i think your basic thesis was that market is still solid through the end of the year, but in the meantime, there could be some volatility and maybe even a pullback. now i think you're saying it's been more stable than what you were expecting, and it has to do with liquidity and cash on the sidelines more than anything else. >> yes, that's right. you're right. we've kind of been sort of i think fooled by seasonality because we thought markets would

be hesitant before, you know, the elections and it's october, but we've -- you know, we've seen this market be incredibly resilient, so i've underestimated how strong this market has been. i think it really shows macro data is becoming less important and it's now the fact that a lot of cash has been on the sidelines. for the last two years investors expected a recession or many thought when the curve inverts we got a recession but at the end of the day there's $6 trillion in cash on the sidelines and october has turned out to be a great month. >> we've seen evidence of what you're saying, and i know how closely you watch it, we've seen it on a daily basis over the last month or so where many days we're even down triple digits in the futures only to end up 250 or 300 points by the end of the session and with no backdrop of positive news, nothing to account for it, other than it seems like there's money on the

sidelines. >> yeah. it feels like investors are under invested in stocks and i think there's people who have dreaded 2024 thinking this is the year we slip into a recession, and instead, we're seeing it with earnings, companies have been resilient. >> we've waited and waited to retest the lows a couple times in 2022 and 2023, and people weren't bullish at all. we didn't get great advances. and now it's almost unstoppable. and nothing seems to be able to knock it off track, whether it's -- i think the ppi and cpi were both a little hotter than people thought. the -- the prospects for a fed continued easing cycle are now open to some conjecture, i think, although most people say it's going to happen, even though things are pretty solid in both the economy and the stock market. >> yeah. i think it makes sense for the fed to be dovish just because inflation is still tracking,

especially pce, towards their 2% target. and now we have some concerns about the job market. i think the fed has to be supportive and i think this election, which is becoming less of a coin toss, i think because it's been a coin toss, people have been sitting on their hands. i think these are reasons markets are starting to have conviction even in front of an election event. >> i think we saw the swing states have even -- some of the swing states look solidly in harris cam as well. michigan and wisconsin, betting and everything else, and, you know, if nbc goes from trump up or harris up 5 to trump and harris tied and then you do a full field and trump is up in a full field, i think you might be right. bitcoin at 65,000. you wouldn't say that the stock market is performing better because it's starting to look like it's less of a coin toss work you?

>> i think markets like visibility, so if -- if it looks like one candidate is now looking to be the surprise winner, then markets can actually trade better before the election. >> wait. does it matter? you said markets like visibility. they have to like what they see on the other side of it, i would assume? >> yes. i mean, i'm probably just citing market history, but whether trump or harris wins, i think stocks do pretty well next year, sort of a post-election rally. but there are definitely differences in sectors and asset classes performance depending if trump or harris wins. but, you know, bitcoin, for instance, is something to watch if trump looks like he's strengthening because trump is running on a pro-bitcoin platform. >> all right. now, you said something, get off of that, the politics, you said that you thought -- agreed with almost the asymmetric risk now,

and i -- i don't think it could go the other way. i think the labor market looks solid given the last report and that we're still -- if pce is 3%, we're still -- got to go down another 33% to hit 2 and they score they're not moving the goal posts. it's 2. it's 2. it's not 2.5. it's 2. >> yes. >> what makes you think that that's in the cards? who knows with the middle east and everything else, but oil back to mid-70s and could go higher. >> yes. >> i just -- i'm more worried about -- i don't know. they're more worried about the jobs picture than stubborn inflation. >> yeah. i mean, you're actually right. oil spikes can cause an inflation spike, and that would be a surprise. but if we look at what has been keeping inflation stubbornly high, it's been shelter, which in the latest inflation report finally is rolling over, and

it's auto insurance which is now just beginning to sunset, so in the second half auto insurance becomes a tailwind and then the question would be, if are core goose going to stay under pressure to bring overall inflation down and looks like core inflation -- sorry on goods, looks like it's going to remain soft. i think inflation doesn't have the upside drivers except for what you're seeing of the commodity shock. >> the crazy dual mandate, they're almost diametrically opposed. i don't know how you try to satisfy both. but because of it, even if the stock market is at new highs, even if gdp is still chugging along and even if we're still at 4% unemployment, you cut rates. you don't save that ammo, the dry powder, you still got to cut rates? >> i mean, it depends on what the neutral rate is, but if the neutral rate is 3, then fed funds here is actually super

restrictive because that's 200 basis points of real -- >> how come my whole life we've been super restrictive? almost my -- we have been typically in much higher interest rate environments with a strong economy and with a rising stock market, all through the 80s and 90s and 2000s, we were always -- we were never this low. almost like we got after the financial crisis zero became something we got used to and now oh, my god we get up to 500 basis points and we think we're in volcker days. 21.5% prime rate. 500 basis points doesn't sound restrictive. >> you're bringing up a good point the economy is holding up really well in the face of a very restrictive fed funds -- >> maybe it's not restrictive. >> yeah. but it's impressive because now we know there's pent up demand. ceos have been caution, the isms weak because people have been

expecting recession. now there's demand coming back and maybe the fed cuts slower but that actually would be a good thing for stocks. >> okay. >> but that doesn't spike inflation? >> that's right. it might even hold back inflation. >> exactly. that way they could maybe satisfy the dual mandate which is a tough job. >> yes. >> to try to do it. they almost have to favor one versus the other depending on the timeframe. we're going to put that on the back burner. i think there should be one dollar stability and let -- >> that is a tough job. >> all right. you do it well. >> so do we. >> i'm not going to ask you which of our mandates you're talking about. >> yeah. >> when we come back, we're going to take a look at the latest developments in the middle east, conflict and what u.s. officials are saying about potential israeli targets inside iran. right now as we head to a break let's take a look at this morning's premarket winners and losers in the s&p 500.

"squawk box" will be right back.

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♪ beautiful shot of new york skyline. u.s. officials now urging the israeli government to avoid targeting oil, gas, and nuclear facilities in the ongoing conflict in the middle east. we want to bring in brian sullivan now who joins us with the latest. what do you think, brian? >> well, andrew, thank you. good morning. i was just in d.c. last week talking to some high-level officials about this topic. nbc news reporting last night israel may have narrowed down its targets inside of iran. we reported back on this on october 1st. i want to be delicate in my reporting because it's not clear what, if anything could happen. nothing could occur. israel could not strike inside of iran. that said, let's take a look at

what could be at least on the oil and gas side possible targets. i laid out what i believe based on research and talking to people, would be the top four oil and gas potential targets. abu dan, mash shah har export part, khark, and kis shshgs island. khark is the loading point for oil, island, where most of the tankers fill up. i bodo not believe that would be a target. it would be an environmental catastrophe and not only knock out their ability to load ships, but the environmental aspect and probably spike oil prices that is something that the administration goes without saying would be hoping to avoid. inside of iran, there are a number of refineries as well. the one that we just showed you abadan is the largest. there are other potential targets. isfahan, iraq, one named tehran as well, that are a little bit

smaller and the reason why those domestic refineries, guys, could indeed become the targets, again, very carefully, if, big if, anything were to happen, is that that would primarily disrupt the domestic iranian economy, could actually bring oil prices lower, because if you tonight have a place to refine oil, but the oil is still flowing, then what happens? you have to sell it on the open market which actually could be one reason why right now at least the pris of oil is down. a lot of issues here, guys. issue with saudi arabia and air space. what exactly -- it's a long way from israel to iran. what could happen. but based on culminations of research and information, those are just some things to keep our collective eyes on. >> brian, is there any thought in your mind that they would actually wait, that the u.s., given this administration's push

against some of this, would wait for the outcome of the u.s. election? i read an analyst report about that last week. >> yeah. yeah. that is an excellent question. i wish i had a more clear answer for you, and i hate to be hedging it, andrew, but the reality is, we just don't know. israel is a sovereign nation. again, last week in washington, speaking to some sitting members of congress, some of them do a lot with defense as well as some other administration officials, they are urging israel, say, listen, we understand you have the right to defend yourself and you have the right to punish iran if you see fit, but consider the world. right. basically, would you target your strike, again, if anything were to happen, in such a way, that it would sort of cripple more of the domestic iranian economy, they produce about 3.27 million barrels of oil a day, a little more than half of that, guys, is

indeed exported, and i should also mention, that it got no attention, but late friday, janet yellen sent what i will describe to be a strongly worded letter, literally a letter, effectively to iran saying, a reminder that the oil sanctions are still on. it was very legalese, difficult to understand, janet yellen, late friday afternoon, reminding the world that we still have sanctions on iranian oil. their exports have tripled, but the sanctions still do exist. >> brian sullivan, thank you for bringing us the latest, some provocative thoughts this morning about what may happen, so thank you. >> thank you. coming up, former sec chair, jay clayton joins us to talk the possibility of a google breakup in broader antitrust efforts. that's next. later, we will talk to former

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welcome back to "squawk box." this morning, the doj considering a potential breakup of google. joining us to discuss this and so much more, jay clayton, former sec chairman, now executive chair of apollo, american express board member and cnbc contributor. jay, you like the idea of breaking up google? do you think there's a problem there? is that the right remedy? >> andrew, it's so interesting that the doj filed their brief and said everything is on the table, including a significant breakup of what we all know is a ubiquitous company. as i look at it right now, no, i'm not in favor of a structural remedy like that. i think the history of those types of remedies in this country, particularly for cutting-edge technology companies, is dubious. but what i will say is, the brief from the justice department, which is pretty short, does recognize a new level of network effects across

the global economy. what do they say are the problems with google? they say they have revenue sharing with distribution globally. they say they can order search results and, therefore, elevate some companies over others. they say they have great power over advertising. at the end of the day, they have a tremendous ability to gather data sets that set them apart from all their competitors. on the one hand you can say that's a ton of power that no company should have, and on the other hand, you could say wow, look at what we've put in the hands of consumers on their phone and they're able to deal with all of that in seconds in what would have taken days. so -- >> jay, here's the question -- >> i celebrate technology. >> right. but as it relates to a behavioral remedy if you said, for example, look, google, you guys are too ubiquitous, we need competition in there, we won't allow you any more to pay apple,

for example, as a distribution partner to make your browser or your search engine the default search engine. is that fair? because then it's actually very interesting. is that fair to apple? do you then have microsoft come in with bing and become the default search engine and pay a much lower fee for what may be a lesser product? >> i don't know. >> your questions show just how dangerous it is when you start to look at the effect on competitors as opposed to the effect on consumers. i'm a strong believer that at the end of the day you look at what's better for the consumer, andrew, than what's better for a particular competitor here. when they started this case, i don't think the doj had any idea that ai would be a potential replacement for search. >> and, therefore, you would do what? nothing? >> i would look at -- >> might be the answer.

i don't know. i'm curious. >> well that's the question. you know, in the government, i think, you know, first you should do no harm. i think that's a pretty good baseline to start with. but i would look at are there places where there's been an information advantage or where there's been true what i would say is true leverage imposed in order to exclude competitors? you know, i found some of the findings there, you know, particularly speculative. >> but how much of this is about, you know, we talk about competition and innovation. how much of this is about being able to use capital today and that is the competitive edge? when you look -- we were talking about nvidia and we had jensen huang who had, you know, had a cameo appearance on our set last week, there is a question about just how -- how much capital, especially when it comes to ai, is needed to be competitive? it seems these days, that if you have enough money and can get

access to enough of jensen's chips, for example, and you have a little bit of secret sauce when it comes to building algorithms that you have a chance in the ai space, but not many have a chance in the ai space, not because of the algorithm piece, but was of the capital piece to buy the chips. >> you bring up a great point that i think a lot of people are missing here, which is let's just say ai is a global race, which i think we all believe, and that ai is important to national security, our economic health and all of these things. we're actually in the most enviable position imaginable. we have at least five that i can count companies that are throwing what some people would say is an inordinate amount of capital at ai. i would not, if i were the government, i would monitor that very closely and see if that five is going to three or two or one, but i love the position we're in right now, and i'm not sure i would do a whole lot about it.

>> jay, before we let you go, one final question that has to do with the story we were talking about in the last hour, lighthighser, going around having meetings around tariffs or at least discussing the idea of imposing tariffs almost immediately if former president trump were to win this election, is your sense that these tariffs would go on immediately? the reason i ask, there was also a view, whichby the way i think i espoused at one point, which was that these tariffs would be used, if they were, as a negotiating tool, as a way of trying to push china and other countries to do things that may be in our interest. now maybe you have to impose them immediately to get that negotiating leverage, but i don't think that almost anybody expected they would be imposed on day one. >> andrew, let me tie your question together with what we were just talking about in terms of antitrust and competition policy. i do think that if you have a

trump victory, day one, i don't know about action, but day one, there will be a review across the board because what we have had during the biden-harris presidency is a substantial shift in the regulatory state, a substantial shift in trade, and i think all of those things that shifted from 2020 to 2024, will be under review. it makes sense. i think that the softening in trade policy with china, the softening of trade policy with iran, the -- and the question of whether secondary sanctions are on the table which brian sullivan was talking about, all of that will be under review. >> okay. jay clayton, thank you for joining us this morning. appreciate it, as always. when we come back, boeing's shares down more than 40% year-to-date. we will talk about the company's struggles after it announced a 10% cut in its workforce. later, walter isaacson joins

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welcome back to "squawk box." it's a mixed picture for the futures this morning. dow is down by about 70 points. s&p futures up by 8. the nasdaq up by about 56. remember, we did see the s&p and dow set a new high once again on friday. in fact the s&p has now set 45 record highs this year, and it closed above 5800 for the first time on friday. >> film "ter fewer 3" clawing its way to the top of the box office opening weekend. independently made film dethroning the sequel to the warner brothers "joker" franchise which fell more than 80% in the second weekend, taking in just over $7 million. that fall marks the worst second

week drop of any movie of the super hero genre, i didn't even know that it was even -- that you call it that. this "terry fier" is a clown with an ax. meeting lady gaga. the joker has a clown face. i saw "piece by piece" in telluride. interesting way to show your life through lego characters. everybody is in it. everybody who helped him in his career. kind of cool. you know pharrell, don't you, andrew? met him? >> big fan. >> yeah. pretty cool. i kind of liked it. it's weird watching two hours worth of lego people moving around, but -- ♪ everything is awesome ♪ >> clown with an ax tough to

miss, as halloween approaches. i don't know what happened with "joker". >> that's the story is how much that fell. >> really unbelievable. >> yeah. >> really unbelievable. coming up, it's been one month since boeing's factory union went on strike. we're going to get a closer look at the company's troubles and if a deal can be reached in the midst of a big layoff number, 17,000 workers. "squawk box" will be right back.

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with so much great entertainment out there... wouldn't it be easier if you could find what you want, all in one place? my favorites. get xfinity streamsaver with netflix, apple tv+, and peacock included, for only $15 a month. . let's take a look at energy prices at the start of the week. you have wti sitting just below $74 a barrel. ice brent at 77.40. joining us to talk about what's moving these markets is am maria send, founder and director of research, and i mean this is really a story of waiting to see what happens with israel and iran. >> yeah. and i think today's reaction is as much about the lack of

details. >> good point f. >> the market was expecting more and talking about participants in asia they were expecting more stimulus will be announced. it's not that it won't come. everyone is waiting for iran and israel to see how it pans out. >> wti up two weeks in a row. it still can be a surprise when you realize this is where we stand with all the geopolitical risk in the world right now. >> 100%. if the past if we were in a situation like this, we would be talking about 100 plus dollars. it tells you how bearish sentiment is. it's an interesting die com my. industry globally are super low but the market is looking to 2025 and seeing it's going to be oversupplied and kind of somehow gotten itself into this mindset it doesn't matter what's going on right now, it is the kind of future and the bearish future

that's what's dictating prices today. >> does that lead you to think there is a potential for huge volatility if something does swing? >> 100%. the volatility because the market is so short, we just don't have anybody really who is long right now. the high frequency traders are a little bit long, but discretionary funds aren't. if they're forced to cover, say there is a target on iranian energy infrastructure and retaliation in the region, that's when you can see the real risk. a lot of traders seem to be trading via options these days, so again f they have to then cover that via futures market you're going to get significant value. >> we haven't mentioned russia and the potential for their oil being disrupted at any point. >> yeah. and i think the market in some ways is very jaded by exactly that since pretty much what i say 2019, the attacks, geopoliticals hasn't necessarily led to supply losses.

the sanctions against russia were never designed to lose russian barrels it was designed to reduce the revenue going into russia. a lot of people bet on losing russian oil. we haven't. it's redirected to china and india. that's why the market is jaded trading geopolitics. >> let's talk the supply side at this point. production in the united states has been a big factor. does that knock out the possibility of getting to the left we used to consider being normal in crazy geopolitical situations like this? >> i just came from houston and for me the biggest takeaway there were the biggest and mid we're not able to grow regardless of price because we are running out of acreage. this year u.s. production has been pretty much flat. it hasn't grown. for all the talk of, like, obviously very important geopolitics, we haven't seen any

media reports how poor supply growth is this year. we started the year thinking 1, 1.5 million barrels of growth. we're tracking 300,000 barrels per day only. >> we keep hearing from, reports, that the saudis are saying, look out. if you don't stick to your allotted production limits, we can produce a whole lot more. is that the case? just turn on the spigots there and flood the market? >> regardless whether they can, i think that's the nuance that's getting lost. not saying we're going out for market share. this is not 2020. simply saying to those who haven't been complying, let's not get a free writer rproblem. you're copying and taking advantage. saying we want to get involved with a plan, 200,000 barrels a day every month, very small. for other. others brings on a little bit more. that's what they're talking about. they're not talking about going

to 12 million barrels a day and flooding the market at all. nobody wants to create that massive downturn in prices eventually lead to a spike in pr prices. they want stability. everything doesn't pitch in this is what you get, you started talking about the demand with china and we've seen stimulus. will that be effective. will we see a big demand surge when it comes to china or stabilization? improvement? >> surge is a strong term right now. to be honest, one of the biggest reasons oil is where it is is on the demand size. chinese demand is weak. this is the first year we're expecting refinery runs in china to fall year on year outside of a corporate year. it tells you of the struggles there. i do think this is important because at least the government saying, yes, it's not -- on its back foot anymore. kind of saying at least back the economy.

stabilizing the economy. some upside, i think we'll see in 2025 there's a lot of housing inventories to go through before construction can really pick up. >> amrita, thank you. good to see you in-person. >> likewise. >> okay. coming up in just a moment, a closer look at boeing and if the company can actually stage a turnaround. we're going to discuss it and debate it. don't go anywhere. you're watching "squawk box" and or is your people are buried in busy work. and you might be thinking... can ai make it all work? it can. on the servicenow platform, ai transforms your entire business. because when your people work better, everything works better. so, let's get to work. idris elba works here? mm-hmm. ya, he's super nice.

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boeing shares lower this morning and down more than 40% year to date. the company now plans to cut 10% of its workforce. over 17,000 jobs, as the machinist strike enters its fifth week. joining us with more on boeing, ken herbert, rbc capital aerospace defense and also other than boeing, it's like the best of times in the industry. worst of times for boeing. it's really -- pretty astounding, that, the dichotomy between, you know, aerospace and defense and then boeing at this point. >> it is. it's frustrating and yes, very

interesting. seeing incredibly strong demand for travel, resulting in very strong demand for after-market spending obviously benefits auto companies in the sector. i would comment, boeing having supply chain issues obviously a strike but supply chain issues are impacting other companies. clearly, outlook for defense is relatively robust and those stocks have opportunity as well. interesting time we're in. let's hope we're hitting bottom here and things can look better into '25. >> when you talk about boeing, though. whether it's deliveries or production or any of the things that you'd need to, to try to analyze the financials of the company, can you do any of that right now with this strike where we are? >> it's a challenge. obviously, the free-cash numbers third quarter with preannouncement friday probably not as bad as ebb feared. some decent delivery activity in the quarter and the strike

started middle of september. i think there's really two points i would make. yes, understanding the cash impact now of the strike ultimately, and boeing has to play as a challenge, most estimates agree $1 billion to $2 billion is month in terms of free-cash flow from the strike. having said that, the announcement's friday was helpful with look at the cost structure and the ways obviously the ceo is able to take cost out and more importantly it's really about giving investors confidence as we come out of this, that the $10 billion in free cash the company outlined back in 2022 is actually still an option. just clearly pushed to the right. the most important thing. increase visibility and confidence and how the financial situation can look as we get through the strike and as the industry continues to recover. >> look, if the strike ended, they go back into, you know, what boeing was doing before the strike what about the 17,000

workers? were they always expendable? get rid of them during the strike and the strike ends missing 17,000 workers, or did you not need the 17,000 in the first place? i'm confused. >> good question. two things. one there's, you know, currently a lot of these people coming across other parts of the organization. you know, maybe not as directly impacted by the strike. reflects maybe there was just opportunity there to take cost out. second, and boeing's been up front about this. boeing kept and elevated workforce through the crisis to support future rate increase, and this also reflects maybe incremental times risk, when you think of the play and production and delivery increases out of the commercial side of the business. >> how long will we think about boeing being sort of out-competed by airbus? can they get back there mojo? they settle the strike and

ortberg improves safety and quality, whatever needs to be done. seems like it's turning around, you know, an ocean liner and in a very small area? airbus probably would be -- the benefit of this for at least a couple years? >> yeah. i mean, unfortunately these -- or fortunately -- these it bets take years to play out across the cycle thinking about the product portfolio and bogue is struggling for the impact of the max and the 2019 grounding. look at the narrow body marketplace, from airbus, that's fundamentally reset at a 60/40, 65/35 advantage for airbus and tend to be the most profitable programs. boeing can get its mojo back as it starts to demonstrate continued execution and deliveries on the max. on the wide-body franchise, boeing continues to enjoy a strong in addition that market. boeing's always had a strong

position certainly in the freighter market. there, it's basically sort of equal footing relative to airbus. maybe even a little slight edge still to boeing. on the max, and a320 a structure reset in market share, of course, incumbency is important in this industry and think about down the road future aircraft, gets much easier to sell replacement than convert a new customer. there's a reset. doesn't mean boeing can't hit cash flow targets. >> the big question i was going to ask. customers set in their ways. set up their entire operation to work with boeing, the boeing infrastructure. any customer defections you've heard of or rumblings to that effect? because that would be a much bigger game changer that once that's gone it's probably really hard to change it? >> yeah. you're right. switching costs are incredibly expensive for airlines. there's always rumblings. they like to negotiate in public, love the ability to the

play airbus on boeing. nothing new. going on for years. not aware of any large customers yet that have significantly defected or are planning to defect. keep in mind i think the max obviously with the changes is a good aircraft. it's delivering efficiencies to airlines in terms of fuel savings and cost savings. obviously airlines are having to wait longer to get the aircraft, but i think the aircraft is performing in the marketplace. so your risk for boeing right now, you just don't have the slots and under promising, or over promising and under delivering relative when you can deliver airplanes. switching costs are very expectative in this industry. >> great. rbc capital aerospace and defense analyst. >> thanks. have a great day. >> you, too. it's 8:00 a.m. on the east coast. you are watching "squawk box" right here on cnbc. i'm becky quick along with joe

kernen and andrew ross sorkin. today's top stories, blackstone and ppg working on an i wear company by bosch and lomb. offers could value the company up to $25 a share. evident says tp g ptpg. and blae interested since 2022. watching shares of sirius xm. a new filing shows warren buffett the berkshire hathaway bought stock. liberty sirius xm. and an impress ish sight in so in texas. hoping to put on a path to re-use rockets to get to the moon and mars. chopsticks caught that rocket. talk about this later this hour

with elon musk biographer walter isaacson. meantime, look at futures this morning. red on the dow, about eight points off. nasdaq higher. 4 47 points higher. bond market closed today for the holiday despite this being a markets found little fear this month so far. for more on this get down to our own mike santoli at the new york stock exchange. mike, midway through october. unfortunately still have got a ways to go. >> no. absolutely. always the opportunity for further payback. i do think, though, this is how the market trades, andrew, when you're anticipating volatility but the fundamentals strong enough to really support things up almost 1% in the s&p month to date. it has slowed down. i keep pointing out the last three months since mid-july that peak. up 2.5% of the 22% year to date

gains. clearly it's become less generous, a little more sector rotation below the service, but a fed easing into an earnings upswing. most incoming data confirming a soft landing hypothesis. anything about seasonal, preelection, geopolitical volatility seems overcome by those fundamentals. you see we've actually kind of clipped to another high. 45 this year. last two years, this part weekend many said the two-year anniversary of start of this bull market. the 13th had intraday low. yesterday. here's s&p versus the emerging markets etf. all emerging markets. russell 2000 small caps. trading like american small cap stocks over that two-year period of time. a lot of talk the fed easing is maybe the medicine needed, a broadening of the economic growth and earnings growth picture. could help. you know, own an index fund, s&p 500, you don't care. up more than 60% in two years.

you can actually see the clenching up anxiety in the volatility index, ununusually high for a market hitting new highs in the s&p 500. up around 2021. usually you would expect this to be 15 or lower. of course, it's that seasonal hedging. then that's all it is. a bid up for volatility protection over the next few weeks. until we get through the election. look at futures. it goes away after that. whether that's a legitimate concern or just kind of a, hey, you never know. people are otherwise involved generally exposed in the market and think the year end will be strong. funny we're showing anxiety in the form of the vix. it's not really evident elsewhere, becky. >> mike, thank you very much. that is exactly what our next guest seems to think. for more on the markets we bring in mary ann bartels, chief can investment strategist at sanctuary wealth. you think we'll get to 6000 on the s&p 500 by end of the year

but maybe not a smooth ride between here and there? >> correct. could be investment in inertia. seeing hedging, mike pointed out. could have volatility. i don't think investors should really be concerned about that. i still think with the fed now recalibrating, going to an easy monetary policy, the economy still growing, we're at full employment. albeit employment slowing. more importantly, corporate profits are growing. it's early in the earnings season but so far earnings are beating by 5%. so i think the investment outlook in the fundamental outlook and technical outlook all align. that's going to allow the market to continue to rally as we go into november and december. and, yes. we do think the s&p can reach 6,000. >> the -- and we did get a step closer friday with a new close above 5800. first time. 5815. the target is looking less and less distant.

tom lee was on earlier. he thinks that the market could behave better if it looks like there is going to be a clear winner for the presidential election. he said markets don't like uncertainty or neck-and-neck races. would you agree with that? >> 100% i agree. i'm not sure those -- whether or not we're actually going to get that clarity, but what i've been saying is, once we know who the declared winner is, i think there can be a relief rally. that the market finally knows who the president of the united states will be, and the concern is not just here in the united states, becky. it's also overseas. overseas investors are also very concerned about this election. so it's not just domestic investors that can buy the market. foreign investors have ability to come here and continue to invest. >> let's talk a little bit about the fed, because obviously that's one of the huge issues you pointed to, too.

cpi and ppi hotter than expected. if the fed decides that it's going to go on pause what does that mean for the short term? i realize longer term we may still be headed in the same direction, but if it puts uncertainty back into the picture for investors, what's the reaction? >> well, where you get the bucking bull. right? where you get a little bit of that volatility, but all it is is the bucking bull. in fact, our year-ahead thesis, fixed and equity markets were going to both have positive returns, but you were going to buck getting there. so it's just a little bit of bucking, but the trend is clear. the trend remains up. >> and you would buy any dips? not just buying dips, buy now? even up nine of the last ten sessions? >> i absolutely would. look at the nasdaq and technology. nasdaq hasn't hit a new record high. i still believe technology is the leadership of this market. that semiconductors remain the

leader of the pack. if you are looking to actually get into technology, i do think that this is the right time to invest. >> okay. thank you. >> thank you. coming up, netflix, one of the biggest reports we're waiting for this week as far as earnings. investors looking forward to that. after a break, talking about what to expect with matt delany and his take on historically painful second week for "the joker" sequel. stay tuned. you're watching "squawk box" on cnbc. (man) look at this silly little sailboat... these men of means with their silver spoons, eating up the financial favors of the 1%. what would become of them when they discover robinhood gold allows others to earn

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welcome back to "squawk box." netflix set to report third quarter results after the bell thursday. shares up nearly 50% this year.

invest is paying attention to two games streaming on christmas day. joining us to talk netflix as well as "joker's" fall at the box office. mentioned earlier. disney's recovery from hurricane milton and so much more. puck's matt belloni. good morning, matt. >> good morning. >> talk netflix first in terms of what you're expecting on be the earnings front and also maybe get into what you wrote about in the newsletter recently. brouhaha over netflix's business model potentially preventing it from getting access to certain films that now want to be back in theaters? >> yeah. first of all, i think on earnings, i think everyone's looking at subscriber growth. looking at growth in the advertising tier, because that's a crucial metric. also looking at engagement. that's the metric netflix is looking at most closely. it's, what are people watching? how much are people watching? and is that number going up

after the password sharing brouhaha. now, on the front of whether they're going to be able to get the top projects, this is a real issue for netflix. on the film side. not talking television. talking film. netflix is trying to compete with the major studios. they have a real problem, because the top filmmakers still want moviess to go to theaters and netflix, unlike amazon, netflix is saying theaters are not our model. experimented putting movies in theater. they're not going it and another mother from director of a promising young woman and saltburn with margot robbie, starring in this. netflix really wants it. they're offering $150 million for this movie and margot robbie and the filmmaker have not decided whether they want to go to netflix because of the theater issue. >> let me ask you about the nfl

a second and football. how much is that is a play on engagement, literally just trying to capture users who are already subscribed and prevent churn? how much of it is an attempt to try to capture new subscribers that maybe aren't on that platform already, and are there enough of those? >> well, i think it's both. i think especially on the latter front. there is a cadre of people out there. seen it with peacock, when they had an exclusive nfl playoff game and seen it elsewhere on amazon as well. a cadre of people out there following the nfl wherever it goes, and perhaps may not be subscribed to netflix, because they don't see themselves as wanting scripted content, or wanting reality shows, and they think those people will subscribe specifically, push them over the edge. it's also an engagement play. netflix has a huge initiative

around live eveents. not calling it sports. still saying they're not in the sports business because they don't have a major sport package. it's a stunt. using the nfl on christmas day to lure people over and to have people sign up or tune in just for these nfl games. >> right. let's also talk about this past weekend, the "joker." disappoint now two weeks' in. hard to say it's not. what happened here? >> this is an example of the, the large jets a studio will give to a filmmaker when he growses $1 billion with his first film. the first "joker" took a swing. hit on every possible way and said, know what? we're going to let this guy do what he wants. first cost $60 million. this one cost $200 million almost. the first one wince at venice film festival. won the festival.

they say, okay. take this one to the venice film festival. not good, the reaction. fans not liking it. a real miss. supposed to be a layup for warner brothers and discovery. not the movie to worry about and now a gigantic loss. theaters dragged down by this. box office down big percentages year over year and a total debacle in every way. >> let me ask you about two other films i'm curious about. one is about "snl," creation of "saturday night live," not performed at the box office i think the way some people hoped early on, and then there's the "apprentice" a movie lovi looki early days of donald trump. >> both struggled. both under $3 million. "asp "apprentice," $1.5 million.

most coverage grossing least at the box office. people did not want to see donald trump. you don't like him e don't want to see him in theaters. you do like him you won't see the theater because he didn't endorse it. left it in no-man's-land out there. the "saturday night live" movie, i thought it was terrific. just a real challenge to get people to see movies about television in theaters. i predict this movie will do very well when it hits netflix early next year. >> finally, disney and the parks, down in florida. what do you think the impact is going to be? >> well, they are certainly feeling like they dodged a bullet at disney. they think that, yes. obviously they closed and will be damage, but they don't think that the hurricane will be a big factor on the overall parks trajectory. the bigger factor is simply the economy and simply the recovery or the sort of anti-recovery from the post-covid surge.

i think that's what investors are watching at the parks. a profit center for disney the past two years. that comes down while still trying to turn the streaming service into a profit machine, that's going to be a real problem. >> matt belloni, newsletter from puck. awesome. appreciate it. >> thank you, man. >> becky? thanks, andrew. when we come back, what kind of edge does a.i. provide to professional traders who can afford to deploy it effectively? we'll talk about that next. then, it's been a busy you phoo days for elon musk. first he went all-out with former president trump at a rally in pennsylvania. then tesla unveiled the robotaxi and shares tanked. then space x pulling off a daring rocket launch this weekend. talk about it all with musk biographer walter isaacson. stay tuned. you're watching "squawk box,"

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welcome back to "squawk box." futures about where they've been for most of the pre-market session. dow is also weaker off about 86, but the nasdaq, a solid s&p up a little, and dow, s&p and nasdaq off their fifth straight positive week with bank earnings kicking off last friday. financials saw best day since back in november. meantime, i want to talk about how things have ended in china for the country's csi 300 index up close to 2%. chinese property stocks jumping an beijing laid out more support measures for that sector over the weekend. a press briefing now by china's ministry of finance seeming to underscore how officials are

focused on tackling local government debt problems rather than stimulus investors are hoping for. separately new data showing china's imports and exports both missed expectations last month. joe, i don't know how that fits into a sort of david tepper modeling of all of this? >> yeah. and it's a long way for us to know exactly what's happening over there. you know what? be nice if -- i keep checking. hasn't told me whether he's got any updates. have you heard from him at this point? >> i have not. i have not. waiting by my phone. >> yeah. >> i was looking at my phone before. >> short term, a great call a great move. i don't know what -- and you know, listen to carl bass he says picking up -- dimes in front of a bulldozer. >> right. >> right. wall street -- what's -- talked to one guy who, trying to use

a.i. to pick stocks. called like the livermore fund or something. remember? a guy who -- lost all of his money and was, i think he killed himself. wall street hedge funds are competing for an edge using a.i. finding new ways to try to beat the markets, kate rooney joins us with more on that story. my question was, is it just ego? just seems like with this, so many ways to try to beat the market. maybe some day, but think if it got a.i. as smart and sentient as humans who still can't do very well beating the market? i don't know. right? you'd have to be better? >> garage in, garage out. right? make sure the data in is really good and train these the right way. portfolio managers are increasingly turning to a.i. talking to hedge fund investors using it at this point and some spending billions building out models and a point some trust it to execute trades with almost no intervention.

they argue there are certain things a.i. can just do better. can't be matched by human traders using it for algorithmic trading, earnings transcripts in realtime and analyze hundreds of pages of financial documents or helps with technical analysis as well. pattern recognition, and this technology's super power is avoiding the emotional pitfalls of investing, this person told me. helps avoid fomo trade. fear of missing out. the person did say good at picking names, a.i. is not as good getting out of certain investments. potential broader market implications as well. so pointing to back in 2007 when hedge funds lost the same models crowding into the same positions and blew each other out causing major volatility. a risk a.i. is also becoming so common on wall street that advantage is competed away. all of this raises the bar for retail investors. the institutions called smart

money pouring now millions into a.i. one hedge fund manager told me "it is not a fair fight for retail especially for some of the more active traders out there," guys? >> talked about all the different a.i. models, and they are similar. i don't know why they'd come to a different conclusion? if they didn't, then they'd all be doing the same thing and exactly -- it would be similar to, when everybody was piling into using similar strategies in 2007, as you mentioned? >> yeah. so it all comes down to the way that you train these models, joe. somebody talked about using certain parameters, but say you want to train a model invests exactly like charlie munger, for example. some say, hey, we've got proprietary ways, do things, training our models in the same co way. others say looking so different because of the training that goes into them. specialize, make them look different instead of the same

exact off the shelf models. hedge funds and investment banks using them and some coming up with their own models. a slight difference but the answer is yes, coming to the same conclusions, buying the same things and we end up with a lot of volatility. >> a.i., deciding to change its mind. those it great investments, intuitive bot saying i'm going to rip up what i always thought was true and change it based upon -- >> instead of just trading by machines, which we've seen. this is not new. machine trading, and most trading we see now is machine trading based on algorithms and already does that. i don't know how this, unless it takes that next step to analyzing something or gut feeling -- yeah. unless it does that it's just machine trading called a.i. >> sort of the direction. generative a.i. sort of the advent of chatgpt this big moment where they've changed. a lot more powerful.

banks and hedge funds using them a lot of years. tech companies say machine learning or ml around for a.i. investment ideas and's that added power is helping. you're right. quantitative trading, hedge funds have been doing this. >> a switch. everything i've thought was true to this point is no longer true. how does -- does generative a.i. get to that point saying, okay. my answer's wrong. my thought process is flawed. here's why and by the way i'm going to rip up all of my investments as a result? >> depends who you talk to. some say absolutely. had to avoid having any sort of intervention saying i need to trust a.i. because the emotional side of trading is taking over. i'm saying, okay. either fomo or some sort of macroheadwind not as big of a deal on the surface but scares from a headline perspective. both said helped them look a bit

more objectively at certain trades. oil and china one doug clinton brought up with you guys. there are certain trades people say, i would not have come up with that if not for a.i. again, it's becoming so commonplace. i think is bar is raised to the point the alpha, the edge is getting competed away in some cases where this is sort of becoming the norm to a point where you've got to get even better than a.i. at this point, but it's raising the bar forever including retail. hard enough to be in the market plus all of this a.i. using. it's making it significantly harder. >> not quite a zero-sum game, but, once a.i. knows how to figure out the market i guess we'll all be able to get 40% a year? and everybody will be rich. we'll all be -- all using a.i. and all be beating the market. then whose losing? >> yes. >> thank you. >> excellent question. >> yeah. coming up, are we finally

able to pinpoint what kind of landing the economy is making or if it's making a landing at all? former fed vice chairman roger ferguson will join us for that conversation. then, elon musk biographer walter isaacson joins us to talk about a very busy few days for the tesla and spacex ceo. reminder heldi heading to a, live to us live using the cnbc app. stay tuned. "squawk box" will be right back.

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welcome back to "squawk box." show you futures now. looking at the dow off, well -- 84 points now. nasdaq looking up, though. 57 points higher. s&p 500 up about 8 points. mentioning bond markets. closed for the day for the holiday. let's also show you something that's not closed, which is bitcoin. always on. 24 hours a day. now sitting just under $65,000. looking at $ 6 5,800.

and wholesale prices showing no change, continued easing in inflation. joining us now to help us decipher the recent signals is former fed vice chairman roger ferguson. former president and ceo of tiaa. now vice chairman of the business council and acnbc contributor. roger, let me just ask. if you were sitting in that fomc meeting takes place beginning of november what would you vote? how would you deal with things at that point? based on the numbers we've seen recently. >> well, look. i started with the last time on talking about this and thought the first move should have been 25 basis points. wouldn't have dissented at that point. i think still they're in a process of easing which i think is probably on balance correct. you're right to say that the most some most recent data inflation were a little hot but not dramatically so.

so we've heard from a number of them basically said, some i agree with, the path back towards 2% would be somewhat uneven. a 25 basis points reduction to move closer to noeutral and see where we are. >> you would not have dissent. michelle bowman didn't want to cut 50 basis points. sounds to me more vocalization from other voting members saying they would not like to see this anything other than a gradual move on these thing. you're right. probably working around a consensus, but did look like in the minutes that the fed chair, powell, maybe put a little more pressure on people to get to that 50 basis points. how does that generally play out when you are trying to build consensus? >> well, look. i read the minutes pretty much the same way you just did. it was a very complicated

discussion. put it that way. they did eventually reach a consensus, but i suspect there are many folks who were, you know, not totally comfortable with that consensus. you've heard some of that coming forward. having said that, i think there's a general consensus that all of the participants shared policy is in restrictive territory. inflation had been coming down and continues to gradually come down. labor markets are in better balance. so at that point it's a judgment call. certainly time to move a little quicker earlier. i think most people would say. if that's the chairman's preference, then we'll go with it. we've since heard from a number of people they're willing to move gradually. i think that feeds the general notion of more 25 basis point cuts, not 50 basis point cuts, going forward. >> is the possibility of a pause on the table or not at this point? >> i don't think the possibility of a pause is actively on the table base and data seen today. recognize more data will come

in, but there is discussion of that with some of the participants in the public. i think raphael bostic suggested he might be open for a pause "if the data suggests that's the right thing to do." a couple of other policymakers i think governor chris waller, president williams from new york both sort of shrugged off the pause notion suggesting the data was always going tobe a little uneven. i think there's not much consensus for pause right now. that may emerge over time but based on the data thus far i suspect most people are going to go into the meeting thinking 25 basis points is the next thing. >> roger, we had a conversation earlier this morning how restrictive rates are at this point. the economy's doing very well. even where things stand. there has been demand from business as rates have come down. it doesn't feel like restrictive territory that some of us were older have gotten used to.

>> i understand that. one could look at the fed gdp forecast now for the third quarter, which was as of a few days ago. i think october 9th or 10th. that number roughly 3.2%. no one thinks that, very few people would imagine that potential growth here is 3.2%. all of that feeds into the question you just raised, exactly how restrictive are we? reason to be cautious and move pretty slowly. you see on the committee a range of views where they're likely to end up. which is another sense that no one really knows quite what the so-called neutral rate is or how far we are away from that illusive notion of the rates. moving gradually, open to a pause if the data disappoints, i think it's the better approach for the next couple of meetings. >> tread lightly. roger, thank you. >> thank you.

coming up, it's elliott hill's first day on the job as ceo of nike. talking with an analyst about what the new leadership could mean for the company. next, elon musk's biographer walter isaacson weighs in on yesterday's achievement by s spacex. a rocket booster descended to the ground. speaking of musk, evercore raising price target on tesla this morning to $195 from $145. thanks for that. thanks for that. okay. so $219. analysts see something he likes there. since he $145 price target before now at $195. stay tedun. "squawk box" will be right back. she switched careers to make money for your weddings. ooh! penny stocks are blowing up.

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now down to three raptor engines. we could see those -- that was the first-stage booster of spacex's starship caught by mechanical arms known as chopsticks. that was yesterday at the company's launch pad in south texas. another test on the way to what spacex hopes is reusable vehicles for getting to the moon as well as mars. it capped a few, a busy few days for elon musk who also unveiled tesla the cyber cab last week. joining us on all of this, a man with really quite a story

background who we now call musk biographer walter isaacson. it's come to that -- actually, an advisor, partner and professor at tulane university and had biographies of some of the greatest men and women in history. and cnn, so many other things, but elon musk is a big enough person where his biographer can be walter isaacson in his own right, and that's okay. he's such a bigger than life character, and we need you to talk about him a lot. >> thank you, joe. it was totally amazing to see those chopstick arms come on in and catch that booster. it's the largest rocket ever made, and not only did it land upright, which he's been able to do with his smaller rockets, but he didn't have landing legs. he used the chopstick arms. nobody, nobody, has been able to

land a rocket upright and shoot it up again and re-use it, but musk that done it more than 1 o 5 times with falcon 9 and now done with the biggest rocket ever made. china hasn't, russia hasn't, boeing of course, hasn't been able to re-use rockets like that and same time that he unveiled the cyber cab, running around picking peel up with no steering wheel and pedals as well as optimus the robot serving drinks at the cyber cab unveiling andalitand ali able to do the space walk in this new spacesuit he built and a lot to do and plus usingc cap astronauts boeing left stranded up there. also, even a.i., talking about a.i. earlier. he's taken xai and brought it up

to near where google is from scratch. >> i don't know what's a.i. and what's not, but i saw in one of the rob ots and i think an actul video, but actually kicking a field goal, and, i mean, shocking to me to see the moves it made after it kicked it to stay balanced looked almost identical to the same moving that a human would make. somehow they've programmed in exactly how the weight gets distributed after you make that move to be able to stay on its feet. it was -- that was mind-boggling to me, too. >> and up to a few years ago, being there, as optimus was being developed in the tesla back studios, and you had to look to see. okay, the risk is actually, it's metal. it's not a real person. because he's made it a little smaller than a human, but

humanoid, and you're right. it's able to do things like -- i remember when he was trying to figure out the fingers. saying, how many degrees of rotation? how many digits should you have on each of the fingers? do we really need all five fingers? those hands are more dexterous than my hands are now. maybe not saying much. >> yeah. i don't know what we should be more impressed with. what evolution did in a couple of billion years? i mean, we are comparing it to what we do without even thinking about it, so i guess both of marvels of both time and the double helix and everything else, the way it works. >> absolutely. >> was waymo, was it disappointing? is it not the -- or had the stock already run up? how do you read the robotaxi construction -- >> compare to waymo, doing quite well. waymo depends on maps and being

in a circumscribed area where each part of the road has already been plotted on a map. tesla can do it anywhere, because it's done through the cameras, and that is pure artificial intelligence. it's a billion frames of video per day being analyzed so that a car knows how to do what a really good human driver will do. i think that's much more important than being able to say we'll do it in this part of san francisco or in this area mapped off, because that doesn't make a car very useful. cyber cab and -- eventually. musk weighs over promises especially with on self-drive, but in a few years, when you truly get unsupervised full self-driving, it transforms transportation on this planet. >> i've seen comments across the political spectrum about elon musk, and there are some people

that want him to be even louder and more, i guess, controversial, but there's other people that really, he's driving them -- some of them crazy, and regardless of his accomplishments, they can judge him and disparage him totally based on appearing at a butler rally. he doesn't give a rat's patootie, i don't think, about what people say, does he, walter? >> no, no, in fact, i wish he would give a little bit more of a care about what other people say. you and i are probably in different camps on this. i think it would be good if he would put down his twitter feed for a while and not be as incendiary and divisive as he is politically. i think it's hurting tesla car sales. i think it's distracting, as you say, from the sort of astonishing accomplishments of the past two weeks but when you ask about musk, most people say, oh, he jumped up and down at the

butler rally. i think that's ridiculous, but he doesn't really care. he's -- even his tesla board of directors, even his brother, is like, calm down, get off the politics kick, because it's certainly hurting tesla. you look at the california coastal commission that has to decide or recommend whether or not he can launch rockets from vandenberg air force base and as they're voting maybe the rights to do more rockets and one of the commissioners says, i've been reading his tweets, and it's bad politically. i think that's wrong to figure out whether or not you should shoot a rocket from the base on the guy's tweets, but i think even though people get excited by this politics stuff, i find it really off-putting. >> yeah, i think you give me a hundred, i don't know, take your

pick, jennifer garner, you know, de niro, give me one elon musk. you got a point. elon musk. if i was trump, that's probably all i would say. elon musk. i rest my case. smartest, richest guy in the world, unequivocally thinks there's -- this is an important election and thinks it needs to go this way. that's all i'd say. i'd end all my campaign ads on that and i would say -- what do you think of that, walter, and just tweak you at the same time? >> i would say that you could be really, really smart in some areas and really divisive and problematic in others. the thing about writing about elon, you got, in my opinion, a very dark side to him. you have this amazing genius to him, and it takes shakespeare tells us we're molded out of faults, even our heroes like henry v killed the prisoners, but -- >> fatal flaws. >> but i find it would be much nicer if musk could focus on

rockets and focus on cars. focus on a.i. >> that depends on where you're sitting, exactly as you say. we all have a dark side, i think. anyway, thanks, walter. >> some of us -- >> okay. >> all right, news on southwest airlines. leslie picker joins us with more on that. hi, leslie. >> hey, becky. yeah, it's official. elliott announcing this morning that it is officially planning to launch a proxy fight at southwest airlines. the firm has about an 11% economic interest, and therefore, is able to call a special meeting of shareholders. in a press release that crossed just moments ago, elliott says it is intending for that special meeting to take place on december 10, 2024, so just a little under two months from now, and the firm says they will be filing an accompanying proxy statement with the s.e.c. in this statement, the firm says that after exhaustive attempts to persuade southwest to

implement the necessary governance changes, we are formally calling a special meeting to give shareholders the opportunity to elect a completely independent best in class slate of director nominees. the firm has nominated eight such directors to the southwest board. becky? >> okay, leslie, thank you. when we come back, we're going to talk about the new chapter for nike that begins today with a new ceo. ayun. reatching "squawk box." this is cnbc. daughter: hey, dad. dad: hey, sweetheart. daughter: what are you doing? dad: i'm gonna clean the fence. daughter: it's a lot of fence. dad: you wanna help me? dad: aim at the wall, but get closer.

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welcome back to "squawk box." today is the first day of nike's ceo's new job on the job, mark elliot hill's first day. joining us with what we may be able to expect from new leadership is barclay's analyst adrian yee. good morning to you. is there a lot that they can do immediately, or we're not going to see the effects of this for another 12 months? >> it's the latter. so, whenever you have a new leadership come into particularly a retail or a branded manufacturer, you have about six months of stuff that's already in the pipeline, so the first, you know, three to six months is somebody that's coming

in to see what they can do to change the preexisting conditions of the business. once they make those changes, after that three to six-month period, the horizon for when that impact is going to be felt is six to nine months hence. having said that, elliott hill was a 31-year veteran of the business. he doesn't need a lot of coming in kicking the tires. he knows exactly what's wrong. to the extent that he can start telling them to stop doing what's wrong, that's as valuable as figuring out what to do right. >> we have only about a minute. real quick, does he throw the kitchen sink at this thing? is the next quarter going to be horrific? they basically get rid of all guidance? it's forever, and it's just -- because he wants to put it all down there and then two, when it comes to innovation, part of the whole argument here has been that they spent too much energy, resources, money, on dunks and air jordans and wihat might be

described as fashion sneakers at this point, and less on the inn innovative stuff. is that something that's fixable quickly? >> the latter is not fixable quickly. it is fixable over time. they have to reinvest back into r&d and demand creation. to your prior question about whether they're going to kitchen sink it, they just kitchen sinked it. however, they kitchen sinked it under the previous management john donahoe strategy. >> okay. adrienne, thank you for joining us this morning as we try to make sense of nike. that does it for us today. make sure you join us tomorrow. "squawk on the street" begins right now. ♪ good monday morning. welcome to "squawk on the street," i